Bill would allow annual utility rate increases

JEFFERSON CITY - Missouri lawmakers have been considering a bill that would allow utilities to raise customers’ rates every year with less control by regulators.

Proponents of the measure, sponsored by Sen. Ryan Silvey of Kansas City, say the increases will be more predictable and subject to yearly limits. But opponents said customers would almost be guaranteed an increase every year, and that the bill’s yearly limits likely wouldn’t protect consumers.

Utilities have long had to submit detailed rate requests and justify their costs to the Public Service Commission, which then has granted what the commission thought were “reasonable and just” rates, usually covering some but not all the request.

KCP&L and Ameren have supported streamlining the regulatory process, but big industrial users have led the opposition in the past. The PSC has taken no official position on the legislation.

The new proposal would amend Missouri’s 1913 regulatory law so utilities could expect quicker and more predictable returns on their investments in power plants, transmission lines and other infrastructure. They could choose to submit such expenses for the past year and, unless the regulators proved the costs “imprudent,” expect to get a set return on those investments.

“A lot has changed in the utility space and how we utilize electricity in the last 103 years,” Silvey said.

Many consumer advocates and industrial energy users oppose the bill, saying its approach would remove much of the PCS’s ability to scrutinize rate requests and control rate increases.

“There’s nothing in this bill to keep rates from going up every year,” said James Owen, the state’s acting public counsel, whose office represents consumers in utility cases.

Advocates say the bill caps increases in utility revenue to 2 percent for each of the first two years, no more than 4.75 percent in any one year after that and a rolling average of 3.5 percent.

Several people testified Tuesday at a hearing of the Missouri Senate’s Commerce, Consumer Protection, Energy and Environment Committee, which Silvey chairs. He hopes to have a final version of the bill to vote on after the General Assembly’s spring break.